The mineral deposits in the Guanajuato area are classic fissure-hosted low-sulphidation epithermal gold-silver-bearing quartz veins and stockwork.

Mineralization
The “Veta Madre” quartz-adularia vein / breccia system is closely associated with the Veta Madre fault and an associated diorite dyke (thickness varying from discontinuous lenses at Guanajuatito to a 50-100m thick body in the Cata, Los Pozos, and Santa Margarita areas), oriented 325-degrees with a 45-degree southwest dip.

Ore mineralization comprises an early silver-rich phase associated with adularia, as well as a later low-silver variant, which is typified by calcite and quartz. The post-ore mineralization is also precious metal poor, with accessory calcite, dolomite, and fluorite. Zone thickness ranges from centimeter-scale to tens of meters.

The vertical extent of the deposits at Guanajuato spans over 600 meters. Mineralization occurring above the 2,100-meter elevation was termed “upper ore”, between 2,100 meter and 1,700 meter “lower ore”, and below the 1,700-meter elevation “deep ore” (Randall, 1994).

The best mineralization is often found related to bends in the Veta Madre orientation (Barclay, 2007 and Rhys, 2013) such as at San Vicente in the Rayas area, and at Cata and Santa Margarita.

At the Guanajuatito area the main mineralization occurs just into the footwall Esperanza Formation deformed siltstone and shale.

At the Valenciana area ........

Valenciana Mine Complex (VMC, formerly known as the Guanajuato Mine Complex or GMC) comprises the Guanajuato and San Ignacio operations. Typically, all zones at the VMC are extracted by the Cut & Fill mining method.

Continuing operations at VMC will be achieved through the backfilling of tailings underground using a hydraulic fill system that will make use of select voids and open stopes that have been created at VMC over the past 450 years of underground mining.

The Guanajuato Silver will benefit from increased operational efficiency through the use of the newly refurbished StopeMate as the Guanajuato Silver can now employ longhole stoping as a mining method where appropriate.

Longhole stoping is used to extract mineralized material from an underground mine by drilling a pattern of closely spaced, parallel holes into the mineralized material and then blasting the mineralized material between the holes. The StopeMate drill is designed to drill these closely spaced, parallel holes quickly and efficiently from a single position. This ensures that the holes are drilled straight and parallel, which is important for extracting mineralized material more effectively, with less dilution and lower costs. The long hole drill is commonly used for underground bulk mining which will be applied in stopes over 1.5 meters in width, this will allow the Guanajuato Silver to increase production in approximately 25% of the production areas of the mine.

Crushing & Grinding Circuits
The ore from the 1,000-tonne capacity hopper is transferred along a 48-inch-wide belt to a 24 inch by 36-inch PettiBone jaw crusher where the 12-inch feed is reduced to less than 3-inch diameter. The feed from the jaw crusher exits along a 36-inchwide belt and feeds a 6 ft wide by 20 ft long double bed vibrating Ludowici screen. The Ludowici screen separates the feed by size with the upper bed separating material greater than 1 inch and the lower bed separating material less than ¼ inch. This ¼ inch “fine” material is then fed along a 24-inch belt to a hopper prior to grinding (currently feed on average of 88% less than ¼ to the mill). The over size from the Ludowici screen is fed to a Metso (300HP) secondary cone crusher for further size reduction which is then fed back to the Ludowici screen along a 24-inch belt to ensure the material is the appropriate size for the mill. The crushing circuit has a backup Simmons 5½ short head cone crusher that is utilized as needed.

Milling
Immediately after the crushing, the ore is stored in a series of "fines hoppers" which has a capacity of 1,800 tonnes. This material passes through chutes at the bottom of the hopper to feed three 24-inch-wide belts where the material is weighed (continuous weighing scale) and fed into three twin Denver of 7 ft by 14 ft ball-mills which are coated inside by a chromiummolybdenum alloy shield on the surface of the cylinder and natural rubber on the "heads". The grinding material used in these mills are 2.5-inch diameter high chrome alloy cast balls. The ¼ inch crushed material enters the ball mill where the movement, impacts and attrition from the balls promotes the wet pulverization of the mineral which is discharged by the mill as a "thick mineral pulp" where approximately 70% of the material by weight is solid and the remaining 30% is water. This thick mineral pulp is then diluted by adding water and feeds into 4 by 3-inch Krebs pumps where the material then feeds a series of Gmax G10 hydro-cyclone classifiers (two cyclones per mill) which carry out the classification of fines before entering the flotation circuit (75% of the material passing minus 200 meshes with automatic sampling). The average content of this material is 28% solid by weight and 72% water. The oversize material is returned to the mill for re-grinded in the closed circuit which has a "circulating load" of 350% thus ensuring the best release of the particles of interest. At this stage of grinding, reagents are added as the ore entersthe mills. This includes the addition of two specific reagents which promote the recovery of gold and silver (promoter MaxGold 900 and promoter 7310, both Cyteg brand products).

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